Inflation cools as Fed stays quiet
Americans are feeling less miserable about the economy this June, as new findings from the University of Michigan show a sharp jump in how people view both current conditions and the near future.
The change comes as tensions around Donald Trump’s tariff war calm down. According to the University’s June survey, the entire consumer sentiment index bounced hard across the board, reversing the negative slide seen earlier this year.
The headline consumer sentiment index jumped to 60.5, beating expectations by a wide margin. Economists surveyed by Dow Jones had projected a far lower figure of 54. This is a 15.9% rise from the previous month.
The jump isn’t just isolated to one part of the data. The reading on current economic conditions climbed 8.1%, and the index that reflects future expectations soared by 21.9%. The University credited the rebound to what many households see as progress in the U.S.–China trade situation.
Trump pulls back after April tariff surge
Donald Trump, after escalating threats in April and calling it “liberation day,” pulled back slightly by early June. The White House introduced a 90-day negotiation window with China, which many Americans saw as a possible turning point. While there’s no deal yet, the pause in aggressive rhetoric seems to have cooled fears for now. That change in tone, more than any actual resolution, appears to have shaped public mood.
Joanne Hsu, the director of the University of Michigan’s survey program, said the reaction wasn’t just emotional—it came straight from people recalculating risks. “Consumers appear to have settled somewhat from the shock of the extremely high tariffs announced in April and the policy volatility seen in the weeks that followed,” Joanne said. But she also added, “However, consumers still perceive wide-ranging downside risks to the economy.” This means that people may be calmer, but they’re far from relaxed.
